tailieunhanh - Bài tập về Kinh tế vĩ mô bằng tiếng Anh - Chương 12

Tham khảo tài liệu 'bài tập về kinh tế vĩ mô bằng tiếng anh - chương 12', kinh tế - quản lý, kinh tế học phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | Chapter 12 Monopolistic Competition and Oligopoly CHAPTER 12 MONOPOLISTIC COMPETITION AND OLIGOPOLY EXERCISES 1. Suppose all firms in a monopolistically competitive industry were merged into one large firm. Would that new firm produce as many different brands Would it produce only a single brand Explain. Monopolistic competition is defined by product differentiation. Each firm earns economic profit by distinguishing its brand from all other brands. This distinction can arise from underlying differences in the product or from differences in advertising. If these competitors merge into a single firm the resulting monopolist would not produce as many brands since too much brand competition is internecine mutually destructive . However it is unlikely that only one brand would be produced after the merger. Producing several brands with different prices and characteristics is one method of splitting the market into sets of customers with different price elasticities which may also stimulate overall demand. 2. Consider two firms facing the demand curve P 50 - 5Q where Q Q1 Q2. The firms cost functions are C1 Q1 20 10Q1 and C2 Q2 10 12Q2. a. Suppose both firms have entered the industry. What is the joint profit-maximizing level of output How much will each firm produce How would your answer change if the firms have not yet entered the industry If both firms enter the market and they collude they will face a marginal revenue curve with twice the slope of the demand curve MR 50 - 10Q. Setting marginal revenue equal to marginal cost the marginal cost of Firm 1 since it is lower than that of Firm 2 to determine the profit-maximizing quantity Q 50 - 10Q 10 or Q 4. Substituting Q 4 into the demand function to determine price P 50 - 5 4 30. The question now is how the firms will divide the total output of 4 among themselves. Since the two firms have different cost functions it will not be optimal for them to split the output evenly between them. The profit maximizing solution is

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